The hybrid price war between Honda and Toyota has been fierce, with both companies slashing prices on their 2010 flagship models. In the end Honda emerged the victor, boasting the cheaper price of $19,800 in the U.S. Now it has taken an early lead in sales as well, setting an unprecedented record in Japan.

The Honda Insight retails for 1.89 million yen ($19,000) in Japan. According to the Japan Automobile Dealers Association, approximately 10,481 Insights sold in April. Small hybrids with an engine size of up to 660 cubic centimeters (aka, minicars) have cracked the top of the sales list in Japan, but the Insight in the first traditional vehicle to do so.

A Honda spokesperson cheered the news, bragging, "The all-new Insight has been very well received by a wide range of customers due to its excellent environmental performance, easy-to-use packaging, light and comfortable driving and affordable pricing."

Toyota is set to release the 2010 Prius next week, with May offering the first taste of the vehicles' head-to-head sales figures. With Toyota aggressively pricing the established Prius, a larger vehicle, at only approximately $1,000 more than the Insight, it is expected to post strong sales as well.

While the sales of the Insight say less about the upcoming competition with the Prius, and more about the appeal of the Insight itself, they do also show that sales of hybrids are picking up again, despite a lag due to the poor economy. That's good news for Toyota and Honda, which make a lucrative $3,100 on each of the hybrids sold, according to recent reports.

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The fuel economy numbers are confusing. In this case, the Civic Hyrbid is a physically larger car at Wheelbase of 106.3 to Insight's 100.4(expense) with a more agressive Hybrid system (expense).

The Insight however, essentially takes the interior space of a Civic and puts it in a Aerodynamic/Mass efficient shape which lowers the overall expense and then uses a less agressive hybrid system which again lowers the expense. Turns out the savings in wieght/aerodynamics are essentially a wash with the reduction in Hybrid "oomph", but Honda can offer the entire package at a much lower price tag.

you forgot to mention that honda intended to undercut the prius. so regardless of manufacturing efficiencies and features, the new insight had to absolutely, positively be cheaper to break the prius mystique.

quote: Or they could have just placed that lower powered engine in the Civic Hybrid to help cut down that $23,000 price tag.

Yeah, your right. Most estimates I have seen would have trimmed around 1,000 dollars from that 23,000 price tag. But the problems comes about in the end fuel economy. The Civic is a heavier car, and despite what people want to believe sometimes, Car wieght does play a role in car performace. The increased aerodynamic drag of the Civic body and increased wieght of the Civic body would have likely lead to more like 35-38 City and 38-41 Highway (when combined with the new Insight's engine). I am going to guess that Honda wants at least a 40 mpg combined EPA rating to "challenge" the Prius. Alot of people suffer from Left-Number Syndrome, and the Combined MPG being 41/42 is alot more attractive than 38/39.

Moving forward, I would expect a revised Civic/Sedan hybrid from Honda using the cheaper Hybrid module, just don't expect to get the same fuel efficieny numbers as the Insight.

Fuel efficiency isn't the problem. They are getting the same fuel efficiency, it was just price. And by cutting down the power of the engine (and I'm also assuming weight of the engine and weight of the batteries needed), they would have easily cut price and mass and actually would have made it more efficient.

IMO, Honda went for this shape because consumers see that shape and immediately think "HYBRID". It's the same reason why so many cell phone providers are trying to imitate the iPhone. Is it necessarily a good thing? If there was a payoff for it (a more efficient hybrid) then yes. But since this is JUST as efficient and (also IMO) in an uglier package when compared to the Civic Hybrid.